Court cases closing in on pitchman Trudeau

CHICAGO – In the decade since regulators first accused him of conning consumers into buying his weight-loss books, TV pitchman Kevin Trudeau has been ordered off the air, fined nearly $38 million and threatened several times with jail for contempt of court.

Yet Trudeau hasn’t paid a penny in damages, claiming he has no assets even as government lawyers alleged he hid his vast wealth in offshore trusts and shell companies while jetting around the world giving speeches to his devotees.

On his radio show and webcasts, the dapper, tanned Trudeau insists it’s all an effort to silence him, a push by vindictive bureaucrats who don’t want the public to know the secrets of the rich and powerful. Trudeau not only has refused to shut up but also laid down the gauntlet.

“I look at this government right in the eye and say, ‘You want to put me in jail?’ ” he said in one recent video posting on his website. “Let’s go to court, baby.”

Now, the years of litigation are coming to a head in separate proceedings five floors apart in federal court in Chicago.

In a scathing opinion earlier this year, U.S. District Judge Robert Gettleman, who levied the multimillion-dollar fine against Trudeau, said the Federal Trade Commission had presented convincing evidence that the onetime infomercial king was “living much more like a prince than the pauper he professes to be.”

According to the judge, Trudeau lived in an expensive mansion in suburban Chicago with two chefs and a butler, and credit card receipts from one four-month period in late 2012 showed he spent more than $100,000 on home furnishings, $16,000 on clothes and a cool grand on fine cigars.

Gettleman ordered Trudeau to comply with sweeping FTC subpoenas and “produce evidence of poverty” or risk being jailed for civil contempt. Over the last few months, the judge heard testimony from lawyers and others whom the FTC alleges helped Trudeau hide his assets. Trudeau took the stand but invoked his Fifth Amendment right against self-incrimination on every question about his assets, records show. Gettleman could rule later this month on an FTC request to jail Trudeau for failing to pay the $37.6 million fine.

Meanwhile, Trudeau also faces a separate criminal contempt charge before U.S. District Judge Ronald Guzman that potentially could land him in prison for years. A jury trial is scheduled for late next month to determine whether Trudeau violated a decade-old consent decree in which he promised not to do any more misleading infomercials.

The legal consequences for Trudeau appear to be building. This month, he nearly missed a seminar-planning session in Canada because prosecutors asked Guzman to force him to turn in his passports – he has dual U.S.-Italian citizenship – and post a bond.

At the hearing, Trudeau’s attorneys sought to convince Guzman that their client had significant ties to Illinois and didn’t pose a risk to flee. The seminars and speeches were his only way of eking out a living, they said.

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Referring to a confidential court report, Guzman wryly noted that Trudeau had recently lived in a lakeside home in Switzerland, had passports from Italy and the U.S., and is married to a Ukrainian citizen who’s been attending school and living in New York. When Trudeau’s attorney, Thomas Kirsch, suggested Trudeau’s wife went to school in New York but did not actually live there, Guzman’s eyes darted up from the report in front of him.

“How does she do this, metaphysically?” the judge asked. “It she there in spirit?”

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Ultimately, Trudeau was allowed to go to Winnipeg after his parents agreed to post their longtime Massachusetts home as collateral for his $200,000-plus bond. The judge ordered that Trudeau turn over his Italian passport in spite of earlier claims that it was locked in a biometric safe in Zurich that could be opened only with his fingerprint ID. On the scheduled day of the trip, the passport suddenly turned up.

“You still have all your fingers, Mr. Trudeau?” Guzman said.

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A charismatic motivational speaker, Trudeau, 50, is also a twice-convicted felon who did a two-year prison stint in the early 1990s for credit card fraud, records show.

After his release, Trudeau transformed himself into an author, growing his business from his base in suburban Chicago and touting products such as pain-relief adhesive tape and a cancer cure involving coral calcium. Soon his infomercials began popping up across the country, advertising solutions for everything from hair loss and weak memory to excessive levels of debt.

In 2004, the FTC imposed a consent decree banning Trudeau from misrepresenting the content of his hit book, “The Weight-Loss Cure ‘They’ Don’t Want You to Know About.” Regulators say he violated the order a few years later with infomercials claiming the book was filled with “easy” techniques when it actually called for prescription hormone injections, a month of colon hydrotherapy and a 500-calorie-per-day diet regimen.

At a contempt hearing in 2007, Gettleman was shown excerpts of the infomercials, including one in which the smooth-talking Trudeau described how he stayed trim despite a diet of prime rib, gravy, butter, hot fudge sundaes, wine and beer. “I can eat whatever I want now, anything, and as much as I want, any time I want. No restrictions now,” Trudeau said in the ad.

Gettleman found Trudeau in civil contempt and entered the $37.6 million judgment based on the number of “Weight-Loss Cure” books sold.

But Trudeau went on the offensive, using his Internet radio broadcast and website to urge supporters to email the judge with messages in support of Trudeau’s products. Hundreds of messages came pouring in, crashing Gettleman’s email account and bringing the normally mild-mannered judge to a boil.

In February 2010, Gettleman found Trudeau to be in criminal contempt and sentenced him to 30 days in jail. But that decision was overturned by the federal appeals court in Chicago, and Trudeau never spent a minute in custody.

In a recent interview, James Kohm, the associate director of enforcement for the FTC’s consumer protection bureau, said the idea all along has been to compensate the victims who paid for the weight-loss book. On his website, Trudeau has said his customers have never asked for a refund because they were happy with the product.

“Given what the book says, that seems highly unlikely,” Kohm said. “But they’re under no obligation to take their money back if they don’t want it.”

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Throughout the case, Trudeau has consistently claimed he has few assets and can’t pay the massive fine. On his website, Trudeau urges supporters to contribute to his legal defense fund, alleging that “forces in government have sought to silence and destroy” him. Lower-level donors are treated to free books. Those who contribute $2,500 or more get to dine with Trudeau.

In April, Trudeau filed for bankruptcy in Chicago, claiming $10 million to $50 million in both assets and liabilities and listing creditors that consisted mainly of companies the FTC claims he controls. Trudeau’s attorneys then tried to use the bankruptcy to put a halt to the contempt proceedings, arguing the bankruptcy trustee now controlled whatever assets Trudeau held.

But the bankruptcy was dismissed in June because Trudeau never filed the required paperwork listing his monthly income and expenditures, records show.

Kimball Anderson, another Trudeau attorney, declined comment on the details of the pending litigation but said Trudeau believes the multimillion-dollar fine is overblown and an infringement on his First Amendment right to free speech

“Mr. Trudeau never received $37 million (from the book sales), and he doesn’t have $37 million now,” Anderson said. “His position is that he’s not hiding any assets nor has the FTC shown that he is.”